Greenpeace challenges GVK on disclosure

Mumbai, 12 June 2012: Greenpeace has lodged a complaint against GVK with the Securities and Exchange Board of India, the National Stock Exchange of India and the Bombay Stock Exchange regarding its massive proposed Alpha coal project in Australia. The complaint raises concerns about incomplete information filed by GVK and a failure to disclose significant events to the exchanges concerning the Alpha project. [1]

On 29 May GVK's Alpha coal and rail project was recommended for approval by the Queensland Coordinator-General, which GVK described as an approval and a major milestone in its statement to the exchanges. However, in a media conference given on 5 June 2012, Federal Environment Minister Tony Burke revealed that GVK had written to him acknowledging that additional work was required to satisfy the environmental approval process [2]. This information was not included at the time when GVK made its statement to the exchanges.

Greenpeace is also concerned that GVK has still not alerted the Indian exchanges on which it is listed to important developments that have emerged since the Queensland Coordinator-General's report was released. These include:

Controversy: conflict emerged between the State and Federal Governments over the Alpha Coal and Rail Project approvals process. This conflict culminated on 5 June with Environment Minister Tony Burke "stopping the clock" on the formal approval process.

Damming Report: The United Nations body responsible for World Heritage Areas (UNESCO) issued a damming report of development plans on the Great Barrier Reef on the 1st June and includes a proposed UNESCO decision that "...requests the State Party to not permit any new port development or associated infrastructure outside of the existing and long-established major port areas within or adjoining the property, and to ensure that development is not permitted if it would impact individually or cumulatively on the Outstanding Universal Value of the [World Heritage] property." This is likely to result in additional environmental scrutiny of the separate approval process for GVK's proposed T3 port development at Abbot Point.

"GVK enjoyed a 5% increase in their share valuation in the week of the Coordinator-General's report, moving out of step with the market trend," said, Arundhati Muthu, Greenpeace campaigner. "But there have since been several significant and serious developments that are likely to adversely impact the project. We are calling on GVK to inform the exchange about these developments because they carry material concern to investors".

"As evidenced by the strongly worded draft report from UNESCO, the world is watching these developments," said Muthu. "The botched effort by the Queensland Government in assessing the Alpha project may require the Commonwealth to redo parts of the approval process at a Federal level, resulting in delays and associated cost blowouts. This is critical information for investors of the Alpha project to be aware of."

"No markets can function without ongoing disclosure," said Muthu. "These investments are problematic on so many levels, investors need up to date information in order to judge the risk they are being asked to invest in," she concluded.

Last week Greenpeace was a partner in an ad placed in the Asian Financial Times, alerting potential investors to the risks carried by the Alpha Coal project.